By Margaret Thomas on Posted in Personal Profit/Advantage exclusion,Wrongful ActThe U.S. District Court for the Middle District of Florida, applying Florida law, held that a directors and officers liability insurance policy did not provide coverage for a claim asserted by a receiver seeking the return of bonus and other compensation amounts paid to a former director and officer of the company because (1) the… Continue Reading
By Emily S. Hart on Posted in Allocation,Personal Profit/Advantage exclusion,Professional ServicesThe United States Court of Appeals for the First Circuit, applying Massachusetts law, has affirmed the district court’s holding that a professional services exclusion in a real estate advisory fund’s D&O policy did not excuse the duty to defend a lawsuit brought by an investor in the fund because the allegations at issue were ambiguous… Continue Reading
By Ashley-Anne L. Criss on Posted in Personal Profit/Advantage exclusionApplying Connecticut law, a Connecticut state trial court has held that no coverage exists under a real estate errors and omissions policy for a lawsuit brought by property investors against two real estate professionals arising from the purported mismanagement of property investment companies. Sarfaty v. United States Liab. Ins. Co., 2018 WL 3060110 (Conn. Super.… Continue Reading
By Nicole Audet Richardson on Posted in Loss,Personal Profit/Advantage exclusion,Public Policy prohibition on insuranceThe United States District Court for the Southern District of Florida has denied an insured’s request for indemnity from its insurer for the amount owed under a settlement agreement with the state of Florida over grand theft charges against the insured. The court held that, under Florida law, the settlement does not constitute covered “Loss”… Continue Reading
By Ashley-Anne L. Criss on Posted in “Claim”,Personal Profit/Advantage exclusionA New York state trial court, applying New York law, has held that a fee arrangement exclusion contained in a professional liability insurance policy precludes coverage for claims arising from an insured’s force-placed insurance business. QBE Americas, Inc. v. Ace Am. Ins. Co., 2017 WL 4122651 (Sup. Ct., N.Y. County Sept. 18, 2017). The court… Continue Reading
By Ashley-Anne L. Criss on Posted in Personal Profit/Advantage exclusionThe United States Court of Appeals for the Ninth Circuit, applying Idaho law, has affirmed a lower court’s decision that a judgment against an insured for a violation of the Clayton Act did not preclude coverage under a liability insurance policy’s “financial gain” exclusion. St. Luke’s Health Sys., Ltd. v. Allied World Nat’l Assurance Co.,… Continue Reading
By Emily S. Hart on Posted in Dishonesty Exclusion,Personal Profit/Advantage exclusion,Professional ServicesApplying Colorado law, the United States District Court for the District of Colorado has held that allegations of collusion to fix wages in violation of the Sherman Antitrust Act do not fall within the scope of professional liability coverage for “counseling” services because “counseling” does not include an alleged agreement to fix wages. Colony Ins.… Continue Reading
By on Posted in Loss,Personal Profit/Advantage exclusionThe United States District Court for the Southern District of Texas, applying Texas law, and adopting the recommendation of a magistrate judge, has held that reimbursement of excessive executive compensation constitutes disgorgement and is therefore uninsurable as a matter of law under a directors and officers policy. Twin City Fire Ins. Co. v. Oceaneering Int’l,… Continue Reading
By on Posted in Loss,Personal Profit/Advantage exclusion,Prior Knowledge/Warranty ExclusionA New York trial court, applying New York law, has held that a $140 million disgorgement payment by an insured broker-dealer to the U.S. Securities and Exchange Commission constitutes insurable loss, based on evidence that the payment did not disgorge the insured’s ill-gotten gains, but rather those of its customers. J.P. Morgan Secs. Inc. v.… Continue Reading
By Edward R. Brown on Posted in Loss,Personal Profit/Advantage exclusion,Wrongful ActAn Illinois federal district court has held that a lawsuit seeking to recover amounts an insured wrongfully refused to pay to another sought only uninsurable restitutionary-type relief, not “Damages,” and thus did not trigger an insurer’s defense obligations under an E&O policy. Westport Ins. Corp. v. M.L. Sullivan Ins. Agency, Inc., 2017 WL 56635 (N.D.… Continue Reading
By on Posted in Allocation,“Claim”,Defense Costs,Personal Profit/Advantage exclusionApplying Montana law, the United States District Court for the District of Montana has held that a D&O policy’s personal profit exclusion, which was implicated by a finding of conversion against an insured director, did not relieve the insurer of the duty to advance defense costs for the other remaining causes of action against the… Continue Reading
By Matthew W. Beato on Posted in Insured v. Insured Exclusion,Personal Profit/Advantage exclusionA federal appellate court, applying Utah law, has held that an insured v. insured exclusion did not preclude a duty to defend where one insured entity had changed its name and disaffiliated from the other insured entity. Church Mut. Ins. Co. v. Ma’afu, 2016 WL 3997212 (10th Cir. July 21, 2016). The court also held… Continue Reading
By Karen L. Toto on Posted in Personal Profit/Advantage exclusion,Wrongful ActA Massachusetts intermediate appellate court has held that a claim for negligent misrepresentation alleged a Wrongful Act, even though the alleged damages were based on contractual services. Winbrook Comm. Servs., Inc. v. U.S. Liability Ins. Co., 2016 WL 3245059 (Mass. App. Ct. June 14, 2016). Additionally, the court held that the creation of an opportunity… Continue Reading
By Edward R. Brown on Posted in Personal Profit/Advantage exclusionThe United States Court of Appeals for the Ninth Circuit has affirmed a decision in favor of an insurer, holding that the business enterprise and trust exclusions in a lawyers professional liability policy barred coverage for a suit alleging self-dealing by the insured attorney and his firm. Christensen v. Darwin Nat’l Assurance Co., No. 14-15914… Continue Reading
By Jessica C. Lim on Posted in Defense Costs,Personal Profit/Advantage exclusionA federal court in Idaho has held that “bargaining leverage” in violation of state and federal anti-trust laws is an insufficient gain for purposes of triggering an insurance policy’s improper personal profit or financial advantage exclusion. St. Luke’s Health Sys., Ltd., v. Allied World Nat’l Assurance Co., No. 1:14-CV-475-BLW (D. Idaho Sept. 4, 2015).… Continue Reading
By Leland H. Jones, IV on Posted in Personal Profit/Advantage exclusion,Professional ServicesApplying Oregon law, the United States District Court for the District of Oregon has held that an insurer had no duty to defend or indemnify an accountant for a lawsuit alleging breach of contract and breach of fiduciary duty for the accountant’s failure to repay funds to a client owed under promissory notes because the… Continue Reading
By Executive Summary on Posted in Dishonesty Exclusion,Personal Profit/Advantage exclusion,Prior Knowledge/Warranty ExclusionA federal district court, applying Virginia law, has held that an insurer entitled to recoup defense expenses also was entitled to pre-judgment interest on its payments. Protection Strategies, Inc. v. Starr Indemn. & Liab. Co., No. 1:13-CV-00763 (E.D. Va. Aug. 18, 2014). Wiley Rein LLP represents the insurer.… Continue Reading
